Economy

By Jim Puzzanghera
November 7, 2014

October’s solid labor market growth of 214,000 net new jobs helped push the unemployment rate to a six-year low, but wasn’t strong enough to boost workers’ wages significantly, economists said.

“Employers are still holding all the cards,” said Elise Gould, senior economist at the Economic Policy Institute, a think tank focused on the needs of low- and middle-income workers.

“There are so many potential workers out there that employers don’t really need to pay higher wages,” she said.

Wage growth picked up slightly in October, with average hourly earnings rising three cents to $24.57 after being flat the previous month, the Labor Department said Friday.

Overall, wages were up 2% for the 12 months ended in October. That was a bit better than the 1.7% inflation rate, but not nearly enough growth to make up for the ground lost during the Great Recession.

The top-line numbers of the Friday’s report were good.

October’s job gains were down from the previous month’s upwardly revised figure of 256,000 and below economists’ expectations, but still represented solid growth.

The Labor Department said job growth was slightly stronger in August and September than originally estimated, with 31,000 more positions added.

Those revisions pushed August’s figure to 203,000, meaning the best streak of job creation since the 1990s did not end in the summer, as was originally thought.

With October’s solid growth, the economy now has added more than 200,000 jobs for nine straight months. That’s the best performance since a 19-month streak from 1993-95.

Job creation has averaged 222,000 for the 12-month period ended Oct. 31.

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For the Record

Nov. 7, 7 a.m.: A previous version of this post stated that job creation has averaged 222,000 so far this year. The figure is for the 12 months ended Oct. 31.

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The unemployment rate fell 0.1 percentage point to 5.8%, the lowest since July 2008.

Unlike some previous declines, the drop was not driven by discouraged unemployment workers giving up their job search.

The civilian labor force increased by 416,000 in October, the first monthly growth since June.

That led the labor force participation rate to tick up 0.1 pecentage points to 62.8% last month after hitting the lowest point since 1978.

The private sector added the vast majority of October’s net new jobs, with government payrolls growing by only 5,000.

But lower-wage industries saw the biggest increases in hiring, which kept wage growth low.

Restaurants and bars added 42,000 net new jobs, while retail shops added 27,000, the Labor Department said.

Higher-paying sectors lagged in job growth. Manufacturers expanded their payrolls by 15,000 and construction firms by 12,000.

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